Porsche Manipulation Probe Widens to Supervisory Board

Prosecutors are investigating whether Porsche SE misled investors in 2008 when it denied that it sought to buy Volkswagen AG. Photographer: Daniel Acker/Bloomberg

Feb. 12 (Bloomberg) -- The role of Porsche SE’s supervisory
board during a failed bid to take over Volkswagen AG is being
investigated as a three-and-a-half-year-old market manipulation
probe spreads to the family of the company’s founder.

Stuttgart, Germany, prosecutors, who have already charged
former Chief Executive Officer Wendelin Wiedeking and ex-Chief
Financial Officer Holger Haerter, have sent letters to everyone
that was on Porsche’s supervisory board in 2008, informing them
about the probe, spokesman Jan Dietzel said today.

The expanded probe means that prosecutors have contacted
family members of Porsche founder Ferdinand Porsche. The board
is led by his grandson Wolfgang Porsche. Ferdinand Piech, a
cousin of Wolfgang, is also a member.

Prosecutors are investigating whether Porsche misled
investors in 2008 when it denied that it planned to buy VW. The
company still faces suits seeking more than 4 billion euros
($5.38 billion) in Braunschweig, Germany, over the issue.

Porsche spokesman Albrecht Bamler yesterday said the
prosecutors were investigating the board and declined to comment
further today. The carmaker and its former executives have
rejected the allegations.

Labor Representatives

Members of the board, including labor representatives, are
being looked at, Dietzel said. Prosecutors are reviewing whether
the men aided Wiedeking and Haerter in market manipulation
between March 2008 and October 2008, he said.

Wolfgang Porsche didn’t immediately reply to a request for
comment left with Bamler. Piech didn’t reply to calls for
comment on the probe.

Anton Hunger, Porsche’s former head of communication, said
in an interview that he is also a suspect. Hunger declined to
comment on the allegations.

A New York court in December threw out a lawsuit by 26
hedge funds accusing Porsche of hiding a plan to corner the
market in Volkswagen shares. The hedge funds agreed not to
appeal the U.S. ruling after striking a deal with Porsche that
allows them to sue in Germany.

Following the victory in the U.S. case, the criminal
investigation won’t pose “a big danger” for Porsche, said
Juergen Pieper, an analyst at Bankhaus Metzler.

Perfectionism Pursued

“This is the perfectionism that’s being pursued to clear
everything up,” Pieper said in an interview. “The decisions
have gone Porsche’s way so far.” He rates the company’s shares
“buy.”

Porsche shares rose 0.3 percent to 65.18 euros in Frankfurt
today.

In the period between March 10, 2008, and Oct. 2, 2008,
Porsche denied at least five times that it planned to increase
its VW stake to 75 percent, prosecutors have said. The company
in October of that year disclosed a plan to take control of the
carmaker.

Porsche and VW agreed to combine in 2009 after Porsche
racked up more than 10 billion euros of debt in its hostile bid.
Wiedeking and Haerter left Porsche in July of that year. A
merger between the two companies was scrapped in 2011 because of
the civil lawsuits.

To avoid further delays, Wolfsburg, Germany-based VW
purchased the Porsche auto business, completing the transaction
on Aug. 1. The Porsche holding company remains a stock-listed
company, whose sole asset now consists of its VW shares.